Yellen confirmed as Fed chair

posted at 8:01 am on January 7, 2014 by Ed Morrissey

The Senate didn’t get much business done yesterday, thanks to travel difficulties from the Great Global Warming Freeze that is now spreading outward from the north. The one piece of business accomplished by the upper chamber was the confirmation of Janet Yellen to replace Ben Bernanke at the Federal Reserve, which didn’t exactly come as a full-throated endorsement:

Eleven Republicans joined Democrats present on Monday in voting to confirm Yellen, who will face more scrutiny than perhaps any central bank leader before her when she formally takes the reins this month from the retiring Ben Bernanke.

ADVERTISEMENT

Yellen will be in control of an institution that has just begun unwinding years’ worth of unprecedented stimulus for the economy while seeing its regulatory workload explode under the Dodd-Frank financial reform law.

Actually, it’s not unwinding anything. The qualitative easing, which at first came in stages and then became the New Normal, hasn’t stopped at all — it has only slowed slightly. Calling that “unwinding” is akin to calling a reduction in the rate of federal budget growth a “cut” in spending. To actually unwind that stimulus, the Fed would have to stop its qualitative easing, and then allow the money supply to dwindle back down to pre-QE levels.

Will Yellen do that? I’d guess that it’s not high on her list of priorities. She got picked not to be an innovator, but to be a consistent hand on the rudder after Bernanke exits the Fed. Larry Summers probably would have been a little more innovative, but his candidacy got torpedoed by progressives. Barack Obama needs an activist Fed to counteract the consequences of his economic policies, and the Fed has had little choice but to go along over the last few years. The economy’s real growth remains mired in the mid-2% range (the 4.1% of Q3 GDP was in large part due to inventory expansion), and that’s not enough to encourage the kind of investment that leads to job creation. The Fed keeps pressing QE in order to get some incentive for expansion, and even the “taper” continues to feed that policy. Don’t expect that to change with Yellen.

Blowback

Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.

More money printing so the Wall Street limousine liberals will be richer than ever… Printing trillions of dollars to buy the mortgage security toxic assets of wall street, to lend the money to the liberal bankers at zero interest and then these bankers will lend the money to customers at much higher interest… Never before in history of the country that the wall street bankers, most of them are liberals, have made so much profit, and all the severe expense of Americans…

Eleven Republicans joined Democrats present on Monday in voting to confirm Yellen

…gee…wonder who!

KOOLAID2 on January 7, 2014 at 8:19 AM

KOOLAID2:You Rang:)
==================

U.S. Senate Roll Call Votes 113th Congress – 2nd Session

as compiled through Senate LIS by the Senate Bill Clerk under the direction of the Secretary of the Senate

Vote Summary

Question: On the Nomination (Confirmation Janet L. Yellen, to be Chairman of the Board of Governors of the Federal Reserve System )

Vote Number: 1 Vote Date: January 6, 2014, 05:30 PM
Required For Majority: 1/2 Vote Result: Nomination Confirmed
Nomination Number: PN921
Nomination Description: Janet L. Yellen, of California, to be Chairman of the Board of Governors of the Federal Reserve System for a term of four years
Vote Counts: YEAs 56
NAYs 26
Not Voting 18

There is no way the Fed can stop QE at this point. They will talk about tempering QE or slowly pulling back, but it will never end. It has become baked into the market pie and is now a permanent part and the Bond market cant survive without it. Just like the stimulus has now become a permanent part of the Federal budget. They cant be separated without really bad things happening to the economy.

And Politicians are not going to fix that because if they did, they would not be voted back into office during the next election. Things are really that bad.

There is no way the Fed can stop QE at this point. They will talk about tempering QE or slowly pulling back, but it will never end. It has become baked into the market pie and is now a permanent part and the Bond market cant survive without it. Just like the stimulus has now become a permanent part of the Federal budget. They cant be separated without really bad things happening to the economy.

And Politicians are not going to fix that because if they did, they would not be voted back into office during the next election. Things are really that bad.

Johnnyreb on January 7, 2014 at 8:31 AM

The limousine liberals who control wall street would destroy the stock markets in two weeks if the Feds stop printing the trillions of dollars… And because no politician is going to risk the destruction of the markets then the printing of trillions of dollars will continue so it would be given to wall street liberal bankers at zero interest and to for the tax payers to buy these bankers mortgage toxic assets…

The limousine liberals of wall street now control America and the world…

Mark Kirk is now owned by Dick Durbin. Basically, Illinois has one Senator who votes twice. It’s pathetic.

Yellen’s definitely and the activist Obama needs/wants:

WASHINGTON — The Senate confirmed Janet Yellen on Monday as the first woman to lead the Federal Reserve, elevating an advocate of fighting unemployment and a backer of the central bank’s efforts to spur the economy with low interest rates and massive bond purchases.

…Diamond and other critics call Federal Reserve Chairman Ben Bernanke the “day trader Fed chairman” and “Magic Ben,” for his ability to print money and propel stocks to record levels. He is leaving office on January 31, to be replaced by Janet Yellen, who promises to continue the controversial policies that have given unprecedented monetary power and influence to America’s central bank.